The landscape of public sector procurement has undergone its most significant transformation in decades. The Procurement Act 2023, which came into force on 24 February 2025, fundamentally reforms how local authorities commission leisure management services, simplifying procedures whilst maintaining transparency and value for money requirements.
The new Act represents a wholesale reform, consolidating over 350 individual regulations into a single legislative framework. The previous complex web of EU-derived rules has been replaced by a more flexible regime designed specifically for UK public sector needs.
For local authorities approaching leisure contract procurement, understanding these changes and preparing accordingly determines whether the process delivers an operator capable of meeting community needs and strategic objectives.
Current Procurement Thresholds
Since the Act, procurement thresholds apply to central government contracts over £139,688 and sub-central authorities including local authorities over £214,904 require full procurement procedures under the Act.
Below these thresholds, simplified procedures apply, though authorities must still demonstrate value for money and maintain appropriate records. For most leisure management contracts, the scale and value will exceed thresholds, bringing full procedural requirements into effect.
Opening Opportunities to New Entrants
The Act explicitly aims to open procurement to new entrants including small businesses and social enterprises. Authorities must consider how procurement processes can be structured to enable smaller operators to participate, removing unnecessary barriers whilst maintaining quality standards.
This might involve dividing contracts into lots, simplifying pre-qualification requirements, providing clear evaluation criteria, and allowing consortia or partnership bids. The objective is genuine competition that delivers innovation and value rather than defaulting to incumbent operators or large national providers.
Simultaneously, the Act takes tougher action on under performing suppliers, enabling authorities to exclude those posing unacceptable risks to service delivery, safeguarding, or financial stability.
Competitive Flexible Procedure
The most significant change for the leisure industry is the introduction of the Competitive Flexible Procedure, which replaces the Competitive Procedure with Negotiation and Dialogue. This new approach gives contracting authorities flexibility to design procurement processes appropriate to each contract whilst maintaining transparency and competition requirements..
This flexibility is particularly valuable for leisure management procurements, where authorities often need space to refine specifications, explore delivery models, and ensure alignment with local priorities.
In practice, the Competitive Flexible Procedure allows for multiple stages, such as initial tendering, shortlisting, negotiation and clarification, enabling authorities to structure a process similar to legacy negotiated procedures where appropriate. This adaptability helps ensure that shortlisted bidders fully understand requirements, refine their proposals, and develop solutions that maximise community and financial outcomes.
For leisure operating contracts, the Competitive Flexible Procedure is now the predominant approach in the market. It enables:
- A tailored procurement route that reflects the council’s strategic objectives, service needs and risk appetite.
- Structured negotiation or dialogue to refine investment proposals, commercial positions and delivery models (such as proposed Agency Agreement structures).
- Better-quality final tenders, as negotiation provides an opportunity for bidders to improve both quality and value, something not achievable under more rigid procedures.
- Market confidence, as operators are generally familiar with a two‑stage, negotiation‑based process and expect this level of engagement for contracts of this scale.
Authorities must balance the benefits of flexibility with the need for clear governance, transparent decision‑making and adequate officer resources. While the procedure allows for more interaction with bidders, this also requires careful planning to ensure fairness and compliance.
Nonetheless, FMG’s experience from recent procurements indicates that a structured, two‑stage Competitive Flexible Procedure consistently delivers improved outcomes and more robust contractual positions for local authority clients.
Preparing for Procurement
Sport England's Leisure Services Delivery Guidance (LSDG) emphasises outcomes-focused commissioning, aligning leisure services with Strategic Outcomes Planning Guidance, ensuring procurement specifications reflect community needs and strategic priorities, and establishing monitoring frameworks that track outcomes rather than simply outputs.
Authorities should note that Sport England plans to update this guidance. Current versions provide the foundation, but commissioners should verify they are working from the latest iteration when developing specifications and evaluation frameworks.
Successful procurement begins long before tender documents are issued. Preparation involves developing a Procurement Strategy, the process of which will support the Local Authority to understand the current service performance and opportunities and to define key areas that shape the procurement process and the nature of the future contractual relationship.
These include:
- Strategic objectives the contract should deliver;
- Developing a specification that translates objectives into measurable requirements;
- Developing risk appetite and commercial positions; and
- Determining the appropriate procurement route and evaluation approach.
The Procurement Strategy phase also provides an opportunity for the Local Authority to undertake a Soft Market Testing Exercise, involving presenting high level assumptions to the market to assess market capacity and appetite towards the positions reached by the Council on the above areas to ensure that the contract and process provides market interest and expectations prior to publication.
More increasingly, specifications are shifting away from prescriptive, input‑based requirements towards an outcomes‑focused approach. This reflects the growing role of leisure services within wider health, wellbeing and place‑based strategies, requiring specifications to articulate the outcomes to be achieved rather than detailing how facilities should be operated.
This approach provides flexibility for embedded partnership working, community outreach and targeted interventions within the services specification but requires engagement from wider stakeholders to ensure that the requirements meet the desired outcomes.
Evaluation Considerations
The Competitive Flexible Procedure allows authorities to design evaluation approaches that prioritise what matters most. Common evaluation criteria include quality and social value weighted appropriately against price..
Authorities should resist defaulting to the best price as the determining factor. Quality and social value considerations often outweigh marginal price differences when the objective is maximising benefit over long contract terms.
The leisure operator market is relatively small and highly competitive, with operators generally capable of producing strong, high‑quality tenders. As a result, scoring differentials between bidders are often narrow.
To prevent price from becoming the default deciding factor, Local Authorities should adopt well‑defined quality criteria and a robust evaluation methodology that meaningfully rewards thoughtful, detailed, and outcomes‑focused submissions. This approach encourages operators to provide more tailored and innovative responses, supports true value rather than lowest cost, and ensures the procurement process delivers the wider strategic outcomes the Local Authority aims to achieve.
The evaluation methodology should be transparent, objective, and defensible. Authorities must be able to demonstrate that successful bidders genuinely represent best value against stated criteria.
Contract Management and Monitoring
Procurement doesn't just end when the contract is awarded. The Procurement Act 2023 introduces enhanced transparency requirements including Contract Performance Notices under Section 39 of The Procurement Regulations 2024, mandating publication of KPI assessments and contract breaches throughout the commercial lifecycle.
Robust contract monitoring ensures operators deliver against commitments, enables early intervention when performance issues emerge, supports continuous improvement through regular review, and protects service quality and community benefit.
Effective monitoring frameworks track financial performance, participation rates and target group engagement, customer satisfaction, health and safety compliance, and contribution to strategic outcomes measured through Sport England's Economic and Social Value Model.
FMG Consulting’s Procurement Delivery Under the New Act
FMG Consulting has successfully delivered multiple outsourced contract procurement processes under the new Procurement Act 2023, providing authorities with confidence that processes are compliant, efficient, and deliver desired outcomes.
We have developed template documents reflecting the changes required by the new regime, including specification frameworks and evaluation methodologies aligned with the Competitive Flexible Procedure and monitoring frameworks that track strategic outcomes.
This experience means authorities benefit from proven approaches that navigate the legislative requirements whilst maintaining focus on securing operators capable of delivering community benefit and financial sustainability.
The Strategic Opportunity
Leisure management contract procurement represents a strategic opportunity to reset service delivery, secure operators aligned with community priorities, implement innovations that increase participation and income, and establish monitoring frameworks that ensure accountability.
Navigating the new procurement landscape for leisure management contracts? FMG Consulting provides expert support from specification writing through tender evaluation to contract award, with proven experience delivering procurements under the Procurement Act 2023 and template documents reflecting the new requirements.
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